Ameritrans Announces Favorable Pricing on Two 10-Year Debentures with the SBA.

Business Editors

NEW YORK--(BUSINESS WIRE)--April 1, 2004

Ameritrans Capital Corporation (NASDAQ:AMTC) today announced that the United States Small Business Administration (SBA) set the interest rate at 4.12% on the company's wholly-owned subsidiary, Elk Associates Funding Corporation's 10-year debentures that were pooled for all participants in the SBA's long-term debenture financing program on March 24, 2004. Elk's two debentures included in the SBA's debenture pool are a $5,000,000 debenture issued in September 2003 and a $1,950,000 debenture issued in February 2004, both of which mature in March 2014, for an aggregate of $6,950,000. In addition to the fixed rate of 4.12%, there is an additional annual SBA user fee of 0.866% that will also be charged, making the rate 4.99% before applicable amortization of points and fees. Under the terms of the financing, Elk also paid a 1% commitment fee at the time of obtaining the $12.0 million commitment. A 2.5% leverage fee is also deducted pro rata as the commitment proceeds are drawn down. Both the commitment and leverage fees are amortized over the life of the loan. The company's effective cost of funds on the debentures is approximately 5.34% per annum.

Gary C. Granoff, president of the company, stated, "We are pleased to take advantage of existing market conditions, and to have the rates for these last two debentures favorably priced."

The Company further announced that it had paid off out of available cash an outstanding SBA debenture in the amount of $430,000 that was scheduled to mature in March 2007 costing 8.38% per annum.

With this debenture financing completed, the interest rates on all $12.0 million of SBA debentures obtained by Elk have been fixed. The company's weighted average effective cost on the $12.0 million of debentures is 5.56%, while the company's current short-term bank debt of $32.4 million bears interest at the lower of either the reserve adjusted LIBOR rate, which is approximately 1.10% at present, plus 1.5% or the banks' prime rate, approximately 4.0% at this time, minus 0.5%.

Ameritrans Capital Corporation is a specialty finance company engaged in making loans to and investments in small businesses. Ameritrans' wholly-owned subsidiary, Elk Associates Funding Corporation, has been licensed by the United States Small Business Administration (SBA) as a Small Business Investment Company since 1980. The company maintains its offices at 747 Third Avenue, 4th Floor, New York, New York 10017.

This announcement contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those presently anticipated or projected. Ameritrans Capital Corporation cautions investors not to place undue reliance on forward-looking statements, which speak only as to management's expectations on this date.